Bullish view
- Buy the BTC/USD pair and set a take-profit at 70,000.
- Add a stop-loss at 64,000.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 66,500 and a take-profit at 64,000.
- Add a stop-loss at 68,000.
Bitcoin price stalled during the weekend after staging a strong recovery late last week. The BTC/USD pair was trading at 66,700 on Monday, higher than last week’s low of 60,000. Other altcoins like Ethereum, Solana, and Cardano have also rebounded.
Bitcoin ETF inflows
The BTC/USD pair continued rallying last week week as investors embraced a risk-on sentiment in the market. This view has been characterized by a weaker US dollar and the VIX index and a surge in global stocks.
The US dollar index has plunged to a low of $104.10 while the VIX has tumbled by over 50% from its highest point this year. The Dow Jones index has soared to a record high of $40,000 while the Nasdaq 100 and S&P 500 indices have roared to their all-time highs.
Stocks in the UK, Germany, Japan, and France have all jumped to their all-time highs as optimism that the central banks are about to unwind their hawkish policies. Most economists expect the European Central Bank (ECB) and the Bank of England (BoE) will slash rates in June.
There are also chances that the Fed will start cutting rates later this year since inflation has softened and the economic growth has stalled. Bitcoin and other risky assets do well ahead and during interest rate cuts.
Bitcoin also recovered after signs emerged that investors were buying spot ETFs. Most funds, except the highly expensive Grayscale Bitcoin Trust (GBTC) have seen modest inflows recently. The iShares Bitcoin Trust (IBIT) has over $17.5 billion in inflows and is slowly catching the GBTC.
There will be no major catalyst for Bitcoin this week. Therefore, its performance will depend on technicals and the momentum in the crypto and stock market.
BTC/USD technical analysis
Turning to the 4H chart, we see that the BTC/USD pair continued its strong rebound last week, reaching the second resistance level at 67,518. The 25-period and 50-period moving averages have formed a bullish crossover pattern.
Most importantly, Bitcoin has formed an inverse head and shoulders pattern, a popular bullish sign. It is now stuck at the neckline of this pattern, where it is consolidating. Therefore, the outlook for the pair is modestly bullish, with the next level to watch being the psychological point at 70,000.
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